Mortgage Rates Spring 2026: What Borrowers Need to Know

The Bank of England has cut Bank Rate five times since August 2024, bringing it down from a peak of 5.25% to 3.75%. That easing cycle has fed through to the mortgage market, and borrowers now have access to significantly lower rates than at any point since early 2023. But with markets expecting one or two further cuts before the end of 2026, the question for many is whether to lock in now or wait.

Where Bank Rate Stands

Bank Rate was held at 3.75% at the March 2026 MPC meeting, following five successive 0.25 percentage point cuts that began in August 2024. The rate peaked at 5.25% and was held there for a full year before the easing cycle began. The total reduction so far is 1.50 percentage points.

Swap rates — the wholesale rates that underpin fixed-rate mortgage pricing — have been falling ahead of actual Bank Rate cuts as markets price in further easing. Two-year swaps are currently trading around 3.6%, and five-year swaps around 3.5%, which explains why five-year fixed rates are slightly cheaper than two-year deals.

Current Average Mortgage Rates

Five-year fixed rates are currently cheaper than two-year deals because swap markets are pricing in a lower average rate over the five-year term. This pricing inversion has been a feature of the market since mid-2024 and reflects confidence that rates will continue to fall gradually.

Fixed vs Tracker: The Current Debate

The choice between fixed and tracker rates depends largely on your view of where Bank Rate is heading. Markets are currently pricing in one or two further 0.25 percentage point cuts during 2026, which would bring Bank Rate to 3.25–3.50% by the end of the year.

The case for a tracker: If Bank Rate does fall to 3.25% as many expect, a tracker at base + 0.75% would give you a pay rate of 4.0% — and potentially lower still if rates continue to fall into 2027. You also avoid early repayment charges, giving you flexibility to switch to a fixed deal later.

The case for fixing: A five-year fix at 3.9% gives you certainty for the medium term. If inflation proves stickier than expected, or if the MPC pauses the cutting cycle, you will have locked in a rate below where trackers currently sit. Five-year fixes also protect against the risk that rates rise again.

There is no universally correct answer. Borrowers who value certainty and budgeting stability tend to prefer fixed rates. Those comfortable with some variability and who believe further cuts are coming may prefer a tracker or a shorter-term fix.

The Remortgage Opportunity

If you are currently on your lender's standard variable rate (SVR), you are almost certainly paying more than you need to. The average SVR is around 6.5%, compared to fixed deals below 4.5%. Switching could save hundreds of pounds a month on a typical mortgage.

Borrowers whose fixed-rate deals are expiring in the next six months should also be looking at their options now. Most lenders allow you to secure a new rate up to six months before your current deal ends, which means you can lock in today's rates without paying early repayment charges.

According to UK Finance, around 1.6 million fixed-rate mortgages are due to expire during 2026. Many of these borrowers originally fixed at rates between 1% and 2% during 2020–2021 and will face a significant payment increase even at today's lower rates. A mortgage broker can help you find the best available deal and manage the remortgage process.

First-Time Buyers

The first-time buyer market is showing signs of improvement as rates come down. Affordability remains stretched — the average house price in England is still over 7 times the average salary — but monthly repayments on a 25-year mortgage are now materially lower than they were at the peak of rates in late 2023.

Most lenders require a minimum 5% deposit, though the best rates are typically available at 75% LTV (a 25% deposit) or lower. Some lenders offer specific first-time buyer products, and government schemes such as the Lifetime ISA (which provides a 25% bonus on savings up to £4,000 per year) remain available for those saving towards a deposit.

With the original Help to Buy equity loan scheme having closed to new applications in 2023, first-time buyers are increasingly reliant on standard mortgage products and family support. Guarantor mortgages and income-boosting products from some lenders can help those who are close to but not quite meeting affordability requirements.